EU Trade Controls: COVID-19 Measures at a Glance

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Finally, the difficulties of obtaining medical materials and equipment to fight COVID-19 have triggered a general mistrust in the capacity of trade to adequately respond to countries’ needs in the face of emergencies. This concern will exacerbate if countries do not manage the future distribution of the COVID-19 vaccine wisely. Failures in that case would quickly reinforce isolationist positions that would surely damage future trading relationships. Panel C shows that the differential impact of COVID-19 on Spanish exports can be explained by the large decrease in service exports (52.5%), which is more than twice the decrease in the EU22 countries (20.3%). Italy also experienced a very large reduction in service exports (36.0%).

We were supposed to export 25 billion dollars of energy this year but prices are down, demand is down, the U.S. industry is trading coronavirus contracting. So you’ve got elements of the deal that are just really hard to take seriously in the current environment.

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For the Great Recession, I compare the period of March-August 2009 with the same period of 2008. See de Lucio et al. for a detailed explanation on how calculations are performed. Firms invest heavily in identifying suppliers that will meet their specifications, quality standards and shipment schedule and will have the capacity to respond rapidly to changes in production planning.

Berthou and Stumpner use trade data from 31 reporting countries with the rest of the world until November 2020. They concentrate on the influence of lockdown policies, and in a robustness specification construct a similar measure for third‐country stringency, although not for COVID‐19 incidence variables.

Keeping trade open during and after Covid-19

Specifically, more deaths in the main trading partners of a country induce that country to import significantly more from China than otherwise it would. Interestingly, the positive effect coming from COVID incidence in the main trading partners more than offsets the own negative COVID incidence effect. In addition to the short-term massive reduction in trade flows, COVID-19 might also have longer-term impacts.

• It also highlights trends leading up to the pandemic and provides examples of how the pandemic is affecting trade in a few select cases.
• The early stages of the COVID-19 outbreak have shown the vulnerability of connected supply chains globally.
• Labour shortages at ports, caused by the pandemic, further slowed the movement of goods.
• Throughout earnings season, the focus will likely be less on profits and more on which companies could survive the economic downturn.
• In column 4, we have instead country–product fixed effects, which we keep in all subsequent specifications.

Recently imposed export restrictions by leading producing countries could thus cause significant disruptions in supplies for developing countries and might further contribute to price increases of medical supplies. Taking multiplier effects into account, prices for medical supplies are estimated to rise by up to 23% on average. The results are qualitatively similar to the baseline, but the magnitudes of the coefficients are between 12 and 33 per cent lower in absolute value. Unsurprisingly, then, we observe the opposite pattern when we restrict the analysis to durable goods. All coefficients that are statistically significant in the baseline remain so and maintain the same signs. However, they are between 35 and 92 per cent higher than in the baseline. Furthermore, more stringent lockdowns in the main trading partners cause a statistically significant reduction in imports of durable goods from China.

Multilateral Leaders’ Task Force on COVID-19

The repercussions of the pandemic on other trading partners of a country, and on its own demand for imports from a specific country, are also ambiguous, depending on how third-country demand and supply factors are affected. 5Like us, Bas et al. use both COVID‐19 deaths and lockdown stringency throughout their analysis. If it is higher, then more workers are getting sick and isolating themselves socially, while at the same time more firms slow down production and investment to prevent contagion among their workers. On the one hand, these effects reduce domestic income and, for that https://www.bigshotrading.info/ reason, lower the demand for foreign goods.8 On the other hand, they also reduce domestic production; for given total demand, this increases demand for foreign goods. Although it has been common to focus on the former effect, in principle, each force may dominate. Which one actually prevails is an empirical question, and the answer may depend on factors such as the type of product, the wealth of the country and the goods’ position in the global value chain. Recovery from a crisis can be faster if the intensive margin is the main contributor to the decrease in exports and imports.